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reveal themselves for months or years, Greeley says—meaning the digital health startup might have to wait a long time to realize the full value of the deal. That could put an unsustainable squeeze on a startup’s already-tight budget.
But customers of healthtech startups are increasingly pushing for these kinds of deals, Greeley says. It means a lower upfront cost for them, and they only pay for success. It also tends to better align the priorities of the tech startups and their customers, he says. Lastly, it’s a “crowded market” in healthtech right now, and buyers have a lot of choices.
“They’re pushing hard on these vendors to see if they can get better commercial terms,” Greeley says. “I don’t know what choice a lot of these digital health startups have but to explore value-based models.”